5 Operations Management Flashcards
Explain
Triple bottom line
Businesses need to take into account
• Economic
• Social
• Ecological factors,
to be sustainable
What is meant by Continuum of goods and services?
Only few businesses are goods or services only, most are a combination of both, some with high service, some with high physical content.
Products for instance often come with after – sales service (warranty repairs). A hairdresser (service) may apply some hairspray (product)
Provide one example for
• Economic
• Social
• Ecological
Sustainability
- Economic: - Avoiding waste
- Social - Provide safe work conditions
- Ecological - Avoiding pollution
Define
Cell production
What are the main advantages? (Also called cellular manufacturing)
a form of mass production in which the flow is broken up by teams of workers who are responsible for certain parts of the line
- Higher motivation
- Required cooperation of cells lead to better quality and less waste, hence lower cost
What is the difference between
Mass production and Batch production?
Mass production refers to economy of scale productions, where always the same product will be produced. (e.g. fast moving consumer goods such as Coca-Cola)
“Batch” refers to production of a group of identical products, which – after one batch is produced – is customized, but still produced with the same recalibrated machinery. (e.g. cars that come with a big variety of options.)
What are advantages and disadvantages of
customized job production
Advantages
- Mark-up (gross-profit-margin) is likely high
- Client gets exactly what they want
- Motivates skilled workers, no boredom, flexible
Disadvantages
- Expensive production method T
- ime consuming, also with the client
- Labor intensive and reliant on skilled workers
What should a company consider before they
Change production method
Changing production method has implications not only for operations itself, but for all business functions:
HR – retraining, employees with different skills needed, release non-suitable workers
Finance – change is costly and need to be financed , may interrupt the production and therefore cashflow and working capital cycle
Marketing – product may change by the method, affecting the image of the brand , change of cost may affect the product price
What are the main aspects to be considered before deciding about the
Method of production
- the target market – for example, the business may be producing a high volumes of a low-cost product for a very large market with little disposable income
- the state of existing technology – this can limit how flexible production can be
- the availability of resources – fixed capital, working capital, and human capital
- government regulations– for example, a business may have to meet certain targets for recycling or waste emissions.
Lean production is mainly about avoiding waste.
Which forms of waste can occur, that can be avoided?
● time (waiting for the next stage of production, or waiting for some elements to arrive)
● transportation (the movement within the factory or outside from subcontractors)
● products (defects that need to be scrapped)
● space (too much stock needs space)
● energy (under-utilization of some machines, or old energy-inefficient machines)
● talents (not using workers’ skills and knowledge).
Which are the three
types of resources in which waste can be avoided?
- Physical (material, fuel, space, machines, etc.)
- Human (unproductiveness, idle time)
- Financial (holding stock, tying capital not used elsewhere)
What are (four) methods of
Lean Production?
Explain.
- Kaizen – continuous improvement (corporate culture to always improve processes in learning cycles.)
- Just – in – time (avoiding stock to get supplies only when necessary
- Kanban (cards describing step by step the production process to individuals)
- Andon (automated signals, improving effectiveness)
What is
Cradle to cradle design and manufacturing
Products are designed to be fully recyclable.
Avoids physical waste, often in line with energy savings and CSR –criteria.
Link to sustainability policy : economical, social, environmentally friendly
What is the difference between
Quality Control
and
Quality Assurance?
Quality control is exerted by a a person looking over the production process. Associated with mass production, the job is stopped if there is a quality issue.
Quality assurance is overall control over the process starting with suppliers and incl. after sales services. Associated with cellular production.
The term
quality
suggests that a
product has which (5) features?
- reliable
- Safe
- Durable
- Innovative
- Value for money
What is the main feature of
Total quality management
And what are the main advantages and disadvantages
TQM is an approach to quality enhancement that permeates the whole organization. (not only production)
Advantages:
- Enhances reputation
- Safe cost on the long – run
- Improves the product quality
Disadvantages:
- Cost in the short term
- Difficult to maintain over long
What are factors to be considered when choosing
Location for business
- Cost
- Competition
- Types of Land
- Markets
- Labor Pool
- Infrastructure
- Suppliers
- Government (Laws and Taxes)
What is
Cannibalistic marketing?
Branches located so close that the new branch takes away customer from the other and eats up their profit.
Economic order quantity (EOQ)
Enables to calculate the optimized amount of stock to be ordered, by comparing
Cost of stock out
Cost of holding stock
How does the graph look like ?
How does
lead time
affect the
reorder quantity or the reorder level?
If the lead time is longer the reorder has to be initiated earlier – therefore the reorder level of stock is higher at the time of the reorder. The reorder quantity is not affected.
A school has space for 500 Students but there are only 450.
What is the
Capacity utilization rate?
450/500 = 0.9 = 90%
